First of all, cryptocurrency makes it a new mainstream, therefore all news about them and rumors of “hot”. After every statement of government officials regarding the possibility of regulating or prohibiting the cryptocurrency market we observe a very large price movement. Second, the nature of cryptocurrency is more like “value storage” (such as gold in the past) – Many investors consider this dan hollings plan as an investment option for stocks and physical assets such as gold and fiat (traditional) currencies. Transfer speed also has an effect on cryptocurrency volatility. With the fastest, the transfer requires even only a few seconds (up to one minute), what makes them an excellent asset for short -term trade, if there is currently no good trend in other types of assets.
What should everyone remember – that speed also goes well for the age trend in the crypto currency. While regular market trends may last several months or even for many years – here occurs in time or hours or hours. This dan hollings leads us to the next point – although we talk about the market worth hundreds of billions of US dollars, it is still very small compared to the daily trading volume compared to the traditional currency market or stock. Therefore a single investor who conducts 100 million transactions in the stock market will not cause a large price change, but on the scale of the crypto currency market is a significant and real transaction.
Because the crypto currency is a digital asset, they submit to technical updates and cryptocurrency features software or expand the collaboration of blockchain, which makes it more attractive to potential investors (such as segwit activation basically causes the value of bitcoin duplicated). These elements are combined are the reasons why we observe such great price changes in the price of cryptocurrency in a few hours, days, weeks etc.